A Proposed Procurement Review Task Force in Miami-Dade

The mayor of Miami-Dade County has announced the formation of a Procurement Review Task Force to, according to his May 6 memo (attached; see below), "improve and simplify our procurement process."

The principal goals of the task force are:

To ensure that all procurements continue to be conducted with the maximum level of transparency, fairness and integrity."

To "make procurement more efficient, easier to navigate for vendors," in other words, to significantly reduce "non-value added requirements. This also includes a full review of any changes needed to promote and implement Public-Private Partnerships and innovations from the private sector."

Balancing these two goals is one of the most difficult aspects of procurement. It is very hard to simplify the procurement process and reduce its requirements, while preserving transparency, fairness, and integrity.

The mayor's reference to "non-value added requirements" leads me to wonder whether the mayor's view is skewed toward the second goal. The term "value added" refers to what is added to goods in production. It is a business, not a government term. The use of the term in this context, where government meets business, implies that the values of business will be given more attention than those of government.

The values of government ethics and transparency, and other values such as diversity, do not clearly "add value" to the procurement process. But they do add a different sort of value that can be very important to a community, especially trust in those who manage the community.

Government ethics rules also can save taxpayers a lot of money by preventing such things as political favoritism and inappropriate waivers of rules, specifications that favor a certain bidder, bid rigging, kickback schemes, gifts to procurement officials and their families, and ex parte communications with procurement staff. Preventing these things can save many millions of dollars a year, but they are also valuable in terms of how the community as well as potential contractors view the fairness of the government (unfair processes keep some of the best contractors from bidding).

In this post, I would like to look (1) at other jurisdictions that have gone the procurement task force route and (2) possible reasons why Miami-Dade County has chosen this route.

State Task Forces
As with everything else, the amount of information about state procurement task forces is greater than that about local government procurement task forces. For example, there is a 2013 report from the National Council of Nonprofits about state procurement task forces, with a focus on those involving social services and other contracting work done primarily by nonprofits. And there is a 2010 Pew Center report entitled States Buying Smarter, which focuses on procurement reform in Minnesota and Virginia. Here are links to state procurement task force reports in Hawaii and Maryland.

Municipal Task Forces
There have been a few procurement task forces in American cities, mostly during mayoral transitions. Houston had one that led to a huge 2012 procurement manual. However, it seems to have operated in secrecy and to not have filed a report (I could not find one online). The manual begins with a section on Ethics in Contracting, and says almost nothing about efficiency. It is very rule-oriented, and some of the most important ethics-oriented rules involve state law.

A 2010 mayoral transition task force project in New Orleans included a City Contracting Task Force, whose recommendations led to several executive orders (attached; see below). These executive orders (1) created a Procurement Office to oversee the procurement process and draft comprehensive written procurement procedures; (2) created basic guidelines, to be supplemented by written procedures, for handling contracting for professional services; and (3) created an advisory committee to reform Disadvantaged Business Enterprises programs and certification.

Relevant to the second subject of the executive orders is a 2011 report from the Public Law Center in New Orleans entitled "Deliver Us From Temptation: Best Practices in Procurement of Professional Services" (attached; see below). The Public Law Center's director, David Marcello, served on the task force, presented twelve recommendations to the task force, and co-chaired its Professional Service Subcommittee. A number of the center's recommendations were integrated into the executive orders.

Also see a 2001 report on Public Contracting for Legal Services from three New Orleans-area research institutes, including the Public Law Center. It contains some useful best practices relating to professional services contracting.

Finally, the District of Columbia created a Contracting and Procurement Task Force as part of the transition process of a new mayor. The task force filed a report in December 2006 (attached; see below).

The focus of each of these three task forces was different, as was the impetus. The District of Columbia's major problem appears from the report to have been negligence and staff members not following the rules. One reason was a failure to update and compile procurement rules and regulations, which sounds very similar to the problem with the District's ethics rules and regulations. Similarly, the District's standard operating procedures were not easily available.

In addition, there was no enforcement when procurement rules were violated, largely due to the fragmentation of authority to enforce them, again, similar to the problem in the area of government ethics in the District.

In New Orleans, the principal problem appears to have been corruption and a lack of transparency. Solutions included more transparency and the insulation of bid selection committees from outside interference.

The Situation in Miami-Dade
A March 2014 post on the Political Cortadito blog notes that, in Miami-Dade County, there have been many recent bid protests, that is, protests from businesses that lost competitive bids. And in March, the county council unanimously rejected the administration's recommendation of a winning bid after a yearlong bidding process for a $114 million contract. Some county commissioners pointed to a calculation error that should have been fixed long before. Some blamed the head of procurement, others blamed her boss. A task force cannot solve problems that apply to individual personnel. However, they can suggest changes to the appointment process that will better insulate high-level procurement officials and ensure that they have the necessary qualifications.

One commenter to the post mentions as a problem the recent change to a strong mayor form of government. A change in form of government can change the political dynamics of any governmental process.

Another commenter suggests that the problem is the involvement of elected officials in the procurement process. This is a problem that most elected officials do not want to acknowledge. Involvement in the procurement process involves not only power (which means the possibility of its abuse), but also money in the form of gifts and campaign contributions from contractors who are concerned that they can play only if they pay. Insulation of the procurement process from the political process will minimize ethical misconduct by elected officials as well as inappropriate waivers and delays.

The blogger suggests that one problem is that the bidders are being represented by lobbyists who have good connections with county hall. Like lawyers, lobbyists benefit when a process is stretched out over time.

There are also concerns that the complexity of the procurement process, and the involvement of several bodies and agencies, allows for more opportunities to manipulate it. And the process can simply bog down. It is these concerns that underlie the mayor's desire to have a more efficient process. Efficiency is important, but it must be considered along with the involvement of elected officials in the procurement process and other ethics and transparency issues.

A March 2014 editorial in Engineering News Record argues for the filling of a loophole in Miami-Dade's famous "Cone of Silence" provision that prohibits ex parte communications during the procurement process. Apparently, between rounds of a bidding competition, one bidder sent an e-mail and a big supplemental submission to selection committee members, so that the other major bidder did not have time to respond. The ethics commission said in an advisory opinion in January that the submission was legal; there is no rule expressly prohibiting such supplemental submissions and nothing that says that the stated submission method is exclusive. The editors conclude by saying that "such maneuvers give qualifications-based procurements a bad name."

In other words, the editors are arguing for tighter, clearer rules rather than getting rid of rules to streamline the process. They recognize that rules are most problematic when they are not clear and when they allow people — whether bidders, their lawyers and lobbyists, or elected officials — to take advantage of the loopholes created by rules that are vague or incomplete.

Conclusions
It appears that few people are happy with the current procurement program, but that they disagree over what the problems with it are. This is the kind of situation a well-constituted and -staffed task force can deal with.

However, based on the language of the mayor's announcement, I have concerns about the possible biases of a task force that he selects. He says more about efficiency than fairness, and does not mention the range of problems that people appear to have with the current procurement program.

For example, the mayor says in the memo that he wants "a full review of any changes needed to promote and implement Public-Private Partnerships and innovations from the private sector." However, it is my understanding that public-private partnerships been problematic in Florida, as elsewhere. Should procurement rules make it easier to develop these partnerships, or should they try to prevent the sort of ethical misconduct that often crop up in such partnerships, especially when they are not subject to ethics and transparency laws and programs?

I am concerned that the task force will represent those interests who want to simplify rules in order to remove obstacles to gaming the system and to facilitate the involvement of elected officials. The mayor says in his memo that there will be a county commissioner on the task force, but not someone representing the county's ethics commission, who would be likely to remind task force members of the values that underlie government ethics. It is important that both the ethics commission and the inspector general's office be represented on the task force.

Robert Wechsler
Director of Research-Retired, City Ethics

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